Association CEO, Peter Burgess, said the statements were inserted after the consultation phase and appear to have gone through virtually unnoticed.
Burgess said the statements show changes to the language from the exposure draft stage to the final explanatory memorandum which accompanied the bill.
He said, the Exposure Draft – Explanatory Memorandum section 1.36 states “the focus on delivering income in the objective makes it clear that superannuation savings are intended to be used in retirement”, whereas the bill’s Explanatory Memorandum section 1.28 states “the focus on delivering income in the objective makes it clear that superannuation is not for minimising tax on wealth accumulation or enabling retirees to leave tax-effective bequests”.
“Legislating an objective for superannuation is not a new concept, it is something successive governments have sought to achieve,” Burgess said.
“The SMSF Association has been a long-term supporter of the need to legislate an objective for superannuation. The sector needs stability, consistency, and certainty. Continual changes to the superannuation system erodes confidence and trust and adds complexity to what is an already complex system.”
He said, however, it is important to recognise that super is just one component of a broader retirement income system.
“The framing of the Retirement Income Review and the final report highlights the importance of considering the broader policy impacts across the retirement system,” he said.
“Considering superannuation policy in isolation risks poor policy outcomes and therefore its important policy changes are considered in the context of the overall retirement system.”
Teal MP Zali Steggall also had concerns over the bill and said she has been sceptical about its usefulness and suspects an “ulterior motive” from the government.
“The government has not laid out a clear or cogent case as to exactly why this Bill is needed and why it is needed now. I would like to see further clarity from the government on this point: why this Bill, and why now?” she said.
“We have a Bill in front of us that seems to be a solution in search of a problem. Surely, we could use our time in this House more effectively to address the existing inequities in our super system.”
Steggall said the Bill’s explanatory memorandum states the superannuation system is an important source of capital in the economy which can support investment in capacity-building areas of the economy where there is alignment between the best financial interests of members and national economic priorities.
“This suggests potential tension between the role of the superannuation trustee, whose duty is solely to members of a fund, and those who decide national economic priorities. This seems to be the government wanting to get its hands on superannuation funds,” she said.
“The apparent intention of the Bill is that future actions, either legislative or those delegated to policymakers in law, consider and take into account the purpose of superannuation as set out in this Bill—that is, that it looks at the best financial interests of members and this idea of national economic priorities. What exactly should happen when those two clash? “
Tim Miller, technical and education manager for Smarter SMFS, said Steggall’s speech highlights what the industry has long intimated.
“That is ‘what’s the point?’. The previous government tried and failed and this objective isn’t definitive in what it achieves for superannuation members, it’s more a guidance statement for policymakers that ultimately they can interpret to mean what they want it to mean,” he said.
Enough is enough. Get these socialist imbeciles out of Canberra before they make superannuation a dirty word. I for one will not allow Canberra to get its dirty hands on any of my hard earned retirement savings, and if I don’t survive until age 95 I’ll make sure the unused balance of my savings goes to my deserving children, not to some hare-brained socialist politicians’ pet project.
Steggall is also correct with this statement “We have a Bill in front of us that seems to be a solution in search of a problem”
Section 62(1) SIS Act 97 sets out the sole purpose of a Regulated Funds. Pretty sure that it covers a range of scenarios which cover income in retirement, temporary/permanent incapacity, death benefits etc. Surely if the Government believes that a strengthening of the Legislation is required to stop “estate planning” through a super fund – it would be better to amend S. 62(1)?
[i]”This seems to be the government wanting to get its hands on superannuation funds,” she said.[/i]
Steggall hits the nail on the head. This is exactly what it is about, and always has been. A socialist government attempting to legislate a way for them to get their hands on our money.
The next step will be legislating that all Funds must invest a percentage of their assets in “nation-building” projects so the government doesn’t have to come up with the cash. All for negligible returns of course.
Zali and PB are on the money. Its fairly obvious there has been input from the current government who realise they will need funding for their heavy spending projects ahead and are keen to impose a minimum percentage investment from all Superfunds in those.
Governments needs to leave it to Trustees of the Funds to decide whether their National Economic Priorities are right. If they design Efficient income products around Sensible projects for our future generation’s infrastructure needs, the Investment will come. Legislation isnt needed for this.
And if the Governments of the future dont want to be saddled with huge Pension liabilities, they need to keep some concessions around Super otherwise people won’t save for their own retirement. Through the imposition of the TSB and TCB I feel the Superannuation system design is close to being “just right” and the tinkering needs to stop.